On Mon, Jul 07, 2003 at 01:47:41AM -0400, Jimmy Kaplowitz wrote:
> On Tue, Jul 01, 2003 at 01:09:22PM -0500, Branden Robinson wrote:
> > What you describe has already happened. The "right" to pollute the air
> > that people breathe is already bought and sold like a commodity in the
> > U.S.
> >
> > http://www.bizjournals.com/sacramento/stories/2003/04/21/story8.html
>
> We actually discussed this (pollution permits in general, not the
> article to which you refer) in the introductory economics class I'm
> taking now. Basically, that allows the government to cause a reduction
> in pollution relative to pre-permit levels at the least economic cost
> possible, using free-market principles to allocate the permits
> efficiently. In other words, those people who can reduce pollution
> cheaply will sell the permits to those who have a harder time reducing
> pollution, using the profits to offset the cost to their business of
> reducing pollution. If the total amount of pollution allowed by all the
> permits is less than the pollution before, this will be an environmental
> gain at minimal cost. If they built in some way for the allowed
> quantities to be adjusted (e.g., variable-value or finite-duration
> permits), they can do further reductions using the same
> free-market-based system.
>
> I think it's pretty clever, actually, and it's a good thing for the
> environment rather than a bad one. You're not going to get rid of all
> pollution, because that would shut down too much business/industry, and
> this solution allows for reduction to desired levels in the most
> economically efficient manner possible. You and I often have the same
> knee-jerk reaction to things, and the first time I heard about these (a
> few years ago) I had the same negative reaction you did. Now that I have
> learned about it, my reaction in this case has changed.
The problem with this thinking of course being, that this way, pollution
will stabilize at the levels set, because a lot of countries in the
developing world don't really have "use" for their quotas at the moment,
and will happily sell their quotas, which will lead to more pollution,
not less.
Consider:
P: pollution, Q: Quota
Country A:
P: 10
Q: 50
Country B:
P: 100
Q: 50
Trade allowed situation:
Country A sells 40 of their quota to country B, thus:
Country A:
P: 10
Country B:
P: 90
== P:100
while in the no trade allowed situation we get:
Country A:
P: 10
Country B:
P: 50
== P:60
Of course because mr Bush decided the Kyoto-treaty wasn't really worth
signing, we instead have the C alternative:
Country A..n:
P: x
Q: x
Country USA:
P: inf
Q: Couldn't care less...
And, while pollution is global, it is of little gain to, say, the
smog-infested Los Angeles, that Ulan Bator don't release any pollution
if that pollution instead continues to take place in L.A. because the
local authorities purchased their quotas (of course, L.A. might be a
bad example, because I know that they _are_ doing their best to reduce
pollution even though it's a tough struggle.)
Regards: David Weinehall
--
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